Smart-grid standards an issue in economic stimulus bill

February 3, 2009

By Paul Davidson, USA TODAY

Some of the nation's largest providers of electricity meters say the House's $819 billion economic stimulus bill could put them out of business and wreak havoc in the new market for "smart-grid" technology by favoring certain computer network standards.

In a letter to U.S. senators, providers Itron, Landis+Gyr, Elster and Aclara say the measure "has caused confusion and delays with our utility clients for 2009 projects" that could be eligible for money from the stimulus package. The move also would pre-empt a group that's working on setting technology standards for the smart grid, the letter says.

"This is going to bring a number of projects to a slowdown or a halt," says Ed Gray, vice president of regulatory affairs for smart-meter provider Elster.

Bills in both the House and Senate set aside $4.5 billion for smart grids and smart meters. Basically, that means ushering the century-old power network into the digital age, so consumers can better manage their energy consumption to save money, and utilities can prevent outages.

The original version of the House bill said utilities receiving funding must use Internet-based networking standards in their equipment. A more recent version tones that down, saying they must use "Internet-based or other open protocols and standards if available and appropriate." The Senate bill contains no such language.

Backers of Internet standards say they're preferable because they would let utilities mix and match equipment from a variety of different smart-grid providers. They also would allow different types of equipment to communicate.

"There're going to be a lot of people complaining," says Michael Jung, policy director for Silver Spring Networks, which uses Internet standards in its networking gear. "Leadership is helping people adapt to uncomfortable realities."

But Gray says the bill gives a leg up to Silver Spring at the expense of other providers. Gray and others say some smart-grid companies rely on other types of standards or use proprietary technology in parts of their networks. He says that does not preclude equipment made by different vendors from communicating.

While the modified bill notes that "other" protocols and standards can be used, some utilities may believe "that if they install our technology, they might be placed at a disadvantage," Gray says.

"The initial language would have put some companies out of business," says Dan Delurey, executive director of the Demand Response and Advanced Metering Coalition.

Silver Spring has some powerful political and financial ties.

Former vice president Al Gore and venture capitalist John Doerr are members of the company's advisory board. They're also principals in VC firm Kleiner Perkins Caufield & Byers, which provided $75 million in funding to Silver Spring last fall.